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December 30, 2017

Stocata S&P 500 Analysis: December 30, 2017.

Last week I wrote: "The gap is not closed yet. Contrary, price made another higher high yesterday close to the R1 pivot resistance of December. It looks like a negative divergence is coming up between the index and the indicators. My best guess is still that the gap around 2645 will be filled the coming week possibly, making a further correction down towards 2600. That way there will be a smaller trading range that may even extend to 2560. That trading range may continue some weeks to some months into 2018. I am repeating, be careful, I believe we are possibly at a longer term top that is only there because professionals want to keep price at high levels for presenting a good end-of-the-year report to their customers. Read my comments on the weekly chart and monthly chart for more information regarding the longer term view."

We are two weeks later and the last gap is closed. You can see the negative divergence between the index with higher tops and the indicators with lower tops now confirmed with a larger negative candle and a convergent move between the index and indicators. Technically we must expect a further move down in first instance to 2660 and next to 2625 closing the next gap in the up trend. At that point we should expect some pullback. Read my comments on the weekly chart and monthly chart for more information regarding the longer term view. I wish you all the best for 2018 especially a good health, lot's of fun and good profits with your trading!